Pension Investment Strategies of DC-Type MZ Generation: Early Retirement 'NO', Performance Dividend 'OK'

[Asia Economy Reporter Hwang Junho] The investment tendencies of the MZ generation aged 25-39 who directly manage their retirement pensions have been found to be 'investment-oriented.' Additionally, rather than a desire for early retirement, which has recently been a hot topic, they showed a strong intention to work until the official retirement age.

Mirae Asset Investment and Pension Center revealed these findings on the 16th through Investment and Pension Report No. 53, titled "MZ Generation's Retirement Awareness and Retirement Pension Management Trends." This survey was conducted in November of this year among 1,000 office workers aged 25-39 (born between 1982 and 1996) who are subscribers to defined contribution (DC) retirement pensions.

First, the retirement age preferred by the MZ generation is between 60 and 64, with 24% of respondents indicating a preference to retire after age 65. This result somewhat differs from the notion that the MZ generation desires early resignation for personal satisfaction. In June, the job platform Saramin surveyed 500 companies about early resignation within one year, and 49.2% of the responding companies reported a high rate of early resignation among the MZ generation within one year. Mirae Asset analyzed, "There appears to be a gap between the trending early retirement movement and the MZ generation's realistic perception."

The MZ generation was found to be more investment-oriented than the average DC subscribers. The proportion of retirement pension assets allocated to performance-based products was 38%, higher than the overall DC subscriber average of 22%, indicating a relatively proactive management tendency. The average DC-type retirement pension savings for the MZ generation was 19.74 million KRW, falling short of 20 million KRW.

Furthermore, the larger the total asset size, the more actively they managed their funds. The MZ generation showed a higher allocation to performance-based products as their total assets increased, resulting in higher returns. Additionally, 28% of respondents reported recently shifting their asset allocation primarily to performance-based products. Among 1,000 respondents, 278 had changed their asset allocation to focus on performance-based products within the last two years and experienced improved returns after the change. Respondents who were well-informed about their retirement pension savings and asset allocation demonstrated well-diversified retirement pension investments and favorable returns.

Lee Gyuseong, a researcher at Mirae Asset Investment and Pension Center, stated, "The MZ generation has shown a different level of proactiveness in direct stock investments compared to other generations, and it appears they are also showing a strong investment-oriented tendency in managing their retirement pensions recently." He emphasized, "It is important for the MZ generation to recognize the necessity of adhering to asset allocation principles based on risk management and long-term diversification in future retirement pension management."

This content was produced with the assistance of AI translation services.